Rwanda

In February 2026 and August 2026, the Rwanda Revenue Authority issued new administrative instruments on the tax stamp regime and the VAT Deferral Facility, respectively. The Directives of the Commissioner General on Products Subject to the Affixing of a Tax Stamp, its Design, Procedures for its Issuance, Affixing and Payment require specified excisable products, including soft drinks, alcoholic beverages, juices, and cigarettes, to bear tax stamps before being placed on the Rwandan market. Manufactures are required to affix tax stamps before products leave the factory, while importers must do so before the products are released from customs control. The directives also set out the procedures for the issuance, payment, affixing, and administration of those stamps.

While the Commissioner General Guidelines for the Implementation of the VAT Deferral Facility introduce a mechanism that allows eligible taxpayers in sectors such as manufacturing, mining, mineral exploration, and natural gas, to defer the payment of VAT on qualifying capital goods and machinery. To qualify, existing businesses must derive at least 90% of their annual turnover from the supply of taxable goods or services or, in the case of export-oriented businesses, at least 80% of their annual turnover from exports. New investors must be VAT registered, provide the relevant investment approval documentation, submit a business or investment plan demonstrating that the imported assets will be used exclusively for eligible activities, and show that they are reasonably expected to meet the applicable turnover or export thresholds within a reasonable period after commencing operations. 

The facility applies only to capital goods and machinery classified under Chapters 84 and 85 of the East African Community Common External Tariff (EAC CET) that are imported exclusively for approved business activities and not intended for resale. Certain items, including passenger vehicles, office furniture, office equipment, consumables, and spare parts, are excluded unless specifically approved by the Commissioner for Customs Services. The guidelines also outline the application process, documentation requirements, declaration and reconciliation obligations, monitoring procedures, and circumstances under which approval may be revoked. 

Similarly, in February 2026 and July 2026, Rwanda ratified new Double Taxation Agreements (DTAs) with the Hong Kong Special Administrative Region of China and the Republic of Botswana, respectively. These agreements aim to eliminate double taxation on income, prevent tax evasion and avoidance, and strengthen cross-border trade and investment by providing greater tax certainty for taxpayers operating in both jurisdictions.

Both DTAs establish a framework for allocating taxing rights between Rwanda and the treaty partner on different categories of income, including business profits, dividends, interest, royalties, capital gains, employment income, pensions, and fees for technical services. They also provide mechanisms for granting relief from double taxation, reducing withholding tax burdens on certain cross-border payments, resolving tax disputes through mutual agreement procedures, and facilitating the exchange of information between tax authorities. In addition, both agreements contain anti-abuse provisions designed to prevent treaty shopping and ensure that treaty benefits are available only for genuine commercial arrangements. 

In April 2026, Rwanda introduced two significant tax reforms through Ministerial Order No. 004/26/10/TC on VAT and Ministerial Order No. 003/26/10/TC on transfer pricing.  

The new VAT framework significantly expands VAT enforcement into the digital economy by bringing online goods and services supplied to or consumed by customers in Rwanda within the VAT net. Foreign digital service providers, including software, cloud services, streaming, online advertising, e-learning, and electronic marketplaces, are now required to register for VAT in Rwanda or appoint a local representative. While the order does not prescribe a specific VAT registration threshold for non-resident electronic service suppliers, the general VAT registration rules continue to apply, requiring registration where turnover exceeds, or is expected to exceed, FRW 20 million in the previous fiscal year or FRW 5 million in the preceding quarter, with voluntary registration available for businesses below these thresholds. Where a foreign supplier is not registered or fails to appoint a representative, banks, payment gateways, and mobile money operators may be required to withhold and remit VAT on the transaction. 

The rules also establish clearer place-of-supply criteria, using indicators such as a Rwandan billing address, mobile SIM card, or bank account to determine whether a digital service is taxable in Rwanda. The framework became effective within three months of the publication of the Ministerial Order, that is, at the end of July 2026, allowing the Rwanda Revenue Authority (RRA) time to establish a dedicated registration portal and related compliance modalities. Non-resident suppliers that register for VAT will also be required to comply with Rwanda’s electronic invoicing requirements through the Electronic Billing Machine (EBM) system, with the RRA expected to issue detailed implementation guidance. 

In addition, the Ministerial Order introduces a structured mechanism for correcting VAT invoice errors, including adjustments arising from incorrect pricing, VAT rates, returned or damaged goods, or goods not supplied. While such adjustments are generally made before filing the VAT return, corrections after filing require prior RRA approval. Separate rules apply to invoice cancellations, particularly where the relevant tax period has already been audited or the related input VAT has been refunded. 

On transfer pricing, the new ministerial order marks Rwanda's shit from a documentation-focused approach to a substance-focused regime. The Rwanda Revenue Authority (RRA) will increasingly examine whether related-party transactions have genuine commercial justification, whether the entity earning income actually controls the relevant risks, and whether profit allocation reflects economic reality. The new rules also widen scrutiny of transactions involving low-tax jurisdictions by lowering the relevant tax-threshold trigger from 20% to 15% and strengthen the RRA’s power to disregard artificial transactions lacking economic substance. Further, the new rules introduce a clearer framework for Advance Pricing Agreements (APAs), allowing taxpayers to agree transfer pricing methodologies with the tax authorities in advance to reduce uncertainty and potential disputes.  

In early 2025, Rwanda introduced comprehensive tax reforms spanning 2025 to 2030, including updates to value-added tax (VAT), excise duty, income tax, and the introduction of new levies. This has resulted in the following significant changes to Rwanda’s tax landscape: 

• Introduction of VAT on previously exempt items, including mobile phones, ICT equipment, fuel, fee-based financial services, and local transport of goods by road.

• Digital services tax (DST) introduced at 1.5% on income earned by foreign digital platforms operating in Rwanda with significant national presence.

• Capital gains tax (CGT) rate increased from 5% to 10%, with expanded scope to include more financial instruments, including debt, options, and licences.

• Excise duty amendments include:

• • Import of beauty products now subject to 15% excise duty.

• • Cigarettes taxed at 230 Rwanda francs (RWF) per pack plus 36% of retail price.

• • Beer excise duty increased from 30% to 40% for local and 60% to 65% for foreign brands.

• • Airtime excise duty to rise gradually from 10% to 15% by 2027.

• • New 15% excise duty on amount charged on financial transaction by 1 July 2027.
• Environmental levy of 0.2% on cost, insurance, and freight (CIF) introduced on selected single-use plastic imports.
• Introduction of a 3% tourism tax on accommodation services.

• Strategic petroleum reserves levy has been increased from RWF 32.73 per litre to RWF 50 per litre on petrol and gas oil.

• Introduction of a 15% road maintenance levy on petrol and diesel, the tax base being the CIF value of the imported fuel.
• Annual road use fee proposed at RWF 50,000 to RWF 150,000 per vehicle based on the vehicle type to support infrastructure funding.
• Gaming tax reforms:

• • Withholding tax (WHT) on winnings increased from 15% to 25%.

• • Gross gambling revenue tax for operators raised from 13% to 40%.

• • Businesses undertaking gaming activities exempted from corporate income tax (CIT).

• Hybrid vehicles remain exempt from import duty but are now subject to VAT and tiered excise duty (5% to 15%) based on age.

• Phase-out of VAT exemptions:

• • Machinery, capital assets, and raw materials used in industries will remain VAT-exempt up to June 2026.
  • Electric vehicles will become subject to VAT by July 2028.

• • Energy supply equipment will remain VAT-free until July 2028.

• Increase in the mandatory pension contribution from the 6% to 12% effective from January 2025. The rate will be increased to 14% effective from January 2027 and will progressively increase to 16%, 18%, and 20% annually between January 2028 and January 2030.